Guidelines for disallowing debit of electronic credit ledger under Rule 86A of the CGST Rules, 2017

Disallowing debit of electronic credit ledger restricts use of suspect input tax credit pending objective verification and restoration.

Rule 86A authorises a Commissioner or an authorised officer to disallow debit of amounts from the electronic credit ledger where there are reasons to believe input tax credit has been fraudulently availed or is ineligible based on specified grounds (non existent suppliers, non receipt of goods or services, unpaid tax, claimant non existence, or absence of prescribed documents). The officer must record reasons in writing, ensure the withheld amount does not exceed the prima facie ineligible credit, notify the registered person on the portal, and may later restore debit if satisfied that disallowance conditions no longer exist; restrictions lapse after one year.